Monday, March 14, 2011

In the novel "The Road," Cormac McCarthy presents a vision of what a post-nuclear apocaplypse dystopia would look like in this country. Interestingly, he never offers any clue about how it happens. I'm sure most readers like myself assume it was the result of a global military conflict. In fact, we never see anything beyond what life might look like along the east coast of the U.S. If we look at what is happening in Japan post-tsunami with the country's nuclear plant meltdowns, it doesn't take much imagination to envision how something like "The Road" could happen without World War 3 breaking out. Of course, with the geopolitical meltdowns occurring in north Africa, the middle east, southern Europe and - on a very small scale so far - in the U.S., it's still easier to see WW3 erupting and triggering "The Road."

The more imminent and likely event that will hit the globe, and hit the U.S. especially hard, is some kind of financial holocaust. In a chilling statement that received no mainstream media attention, investment guru Carl Icahn announced recently that he's returning investor funds and pulling out of the market. His reason is that the next big crisis about to hit. I'm guessing his timing is a bit early, but when you have to liquidate billions, you can't wait until the obvious become obvious to everyone. Although he doesn't have the notoreity of Warren Buffet, in my view Icahn is a more shrewd investor and has demonstrated over the years an acute ability to think "outside of the box."

Here's just one of the many fiscal problems hitting this country: "Welfare State: Handouts Make Up One-Third of U.S. Wages." Here's the LINK to the article. Combined, defense and entitlement spending represent something like 80% of the Federal budget. Until the Government is willing to make enough cuts to make the revenue/expense equation balance out, our spending deficits and debt load will continue to increase at a geometric rate until the dollar collapses. That is a plain fact. Let's hope that the test of history does not withstand this event and the financial apocalypse does not lead to a global military conflict. I pray every day that Cormac McCarthy's vision is wrong.

Here is an excerpt from an article of the situation facing the U.S. that is a must-read:

The myth of American Exceptionalism will not protect the country from the revolutionary tsunami that is sweeping the globe. America was not chosen by God as the country that would lead the world for eternity. The hubris and overreach of the American empire has bankrupted the nation. Greed, corruption and arrogance are not limited to North African dictatorships. Crony capitalism supporting a vast military empire, financed by a banker controlled Federal Reserve has failed.

Many people have asked me over the years about the best way to protect themselves from the brewing financial and political disasters in this country. My answer is always the same: I can explain what you need to do to get to the other side of what's coming. BUT, you have to decide if you want to see what it looks like...either way, buy a lot of gold and silver.

Dave, I’m curious as to why the huge selloff in gold/silver overnight? I would think a flight to safety would include some movement into PM’s. Isn’t the japan disaster just going to increase japan’s debt and lead to more yen printing?

I really enjoy your blog and check in daily/weekly..I will have to take a look at Carl's page to see what he had to say, his stlye is obscure to say the least..i.e. deriving value out of a Motorola & Blockbuster? Now to my actual reason for posting, I know its off topic but have you read Blood Meridian?

Yea it is an awesome novel, I know that you would enjoy escaping into it if you find a copy..like the rest of McCarthy's work that I am familiar with it was very deep and left a great deal to the imagination. Definetly worth checking out.

Wow. According to wikipedia, BM is considered one of the greatest novels of the 20th century. I have only read No Country For Old Men and The Road. Based on reading those, I believe McCarthy is one of the best writers I have come across (I was an English major in college but focuses on Victorian literature and some Shakespeare).

Eric Arthur Blair aka George Orwell

"Hope" is not a valid investment strategy

Full Time Jobs Over Last 5 Years

Is Your Gold Missing?

Why Gold?

Gold is the world's oldest currency. You exchange your fiat currency (dollars, euros, yen, yuan) into gold as an insurance policy against catastrophic Central Bank and Government policies which serve to destroy the value of fiat currencies and destroy democracy.

Gold can ONLY be considered an investment to the extent that it remains significantly and historically undervalued in relation to the fiat currencies against which its value is measured. Otherwise it remains the world's oldest currency and is completely free from the counterparty risk associated with currency by Government fiat (i.e. fiat currencies rely on a Government's "full faith and credit.")

Epic Quote - "Jesse" Sent This To Me

"The world will soon wake up to the reality that everyone is broke and can collect nothing from the bankrupt, who are owed unlimited amounts by the insolvent, who are attempting to make late payments on a bank holiday in the wrong country, with an unacceptable currency, against defaulted collateral, of which nobody is sure who holds title." - Anonymous

The Basic Fundamental Problem

What's the solution?

“THERE IS NO MEANS OF AVOIDING THE FINAL COLLAPSE OF A BOOM BROUGHT ABOUT BY CREDIT EXPANSION. THE ALTERNATIVE IS ONLY WHETHER THE CRISIS SHOULD COME SOONER AS THE RESULT OF A VOLUNTARY ABANDONMENT OF FURTHER CREDIT EXPANSION OR LATER AS A FINAL AND TOTAL CATASTROPHE OF THE CURRENCY SYSTEM INVOLVED.”

Ludwig von Mises – Austrian Economist (1881- 1973)

Quote Of The Month Courtesy of "Jesse"

Unfortunately for Larry Summers, Ben Bernanke, and their friends at the BIS, they have not yet figured out how to print physical gold, silver, and other essential commodities, and the world is reaching the point where it might simply start ignoring the New York based markets with respect to essential commodities such as basic materials, oil, foodstuffs, and the like, as they become increasingly irrelevant, fraudulent, and Orwellian. And then where will the financial engineers be, except with no more excuses and no place to hide?

Great Quote From Jim Rogers On Govt CPI Reporting

JR: I mean, we have inflation now. If you go to the shop, whether it’s groceries, or education or insurance or health care, prices are going up for everything. The government lies about it in the US. Some countries lie, many countries don’t: Australia, China, India and Norway. Many countries don’t lie about it and acknowledge that we have inflation. Others lie about it, the UK and the US, but if you go shopping you know prices are up.

Q: Are you saying that the American Consumer Price Index (CPI) published by the US Bureau of Labor Statistics is a lie? JR: In my opinion, yes, of course it is. Have you looked at it? They’ve changed their accounting several times in the past few decades. When housing was 20% to 25% of the CPI and housing was going up, they didn’t count it, saying rents weren’t going up, and then when home prices started going down, they counted it. It’s the same with many things. It’s staggering some of the tortuous reasoning that the BLS has used over the past 25 or 30 years. When the price of gasoline goes up, they say it’s not really going up because it’s better gasoline, better quality, therefore you’re getting more for your money. I mean, it’s endless, the stuff that they say and for some reason people sit there, although more and more people are catching on, and accept what the government says.

Priceless Quote From Richard Russell

On Larry Summers: This doofus practically ruined Harvard when he headed it. I can't think of a worse choice to be chief economic advisor. I wouldn't trust Summers to manage a Starbucks franchise.

Quote of the Week

"The primary function of a Central Bank is to engage in the massive transfer of wealth from the middle class to the wealthy elite. The Federal Reserve was set up to do this with the blessing and support of Congress." - Dave in Denver

If you refuse to believe the above, please read "The Creature From Jekyll Island: A Second Look at the Federal Reserve" by G. Edward Griffin and then explain to me why the Senate voted down the Vitter Amendment and Congress refuses to pass a law requiring a full audit of the Fed, even though the Fed is using taxpayer-backed money to bailout Wall Street and Europe.

Quote of the Month

And very relevant in the context of yesterday's post about gold moving higher against all fiat currencies:

Just imagine what would happen if a mere ten percent of the money currently going into bonds were instead to go into gold. As in 1972, the real move has yet to begin.

- Murray Pollit, Pollit & Co.

A Picture Says It All...

www.moneyandmarkets.com

Golden ore samples produced by Eurasian Minerals

Undisclosed exploration site

The Next Reserve Currency?

1 oz. Chinese Panda

Guess who said this?

Rising prices of precious metals and other commodities are an indication of a very early stage of an endeavor to move away from paper currencies...What is fascinating is the extent to which gold still holds reign over the financial system as the ultimate source of payment.

-Alan Greenspan, 9 Sep 2009

THIS is what REAL money looks like

1 oz. Gold Eagles

Alan Greenspan said what?

“Deficit spending is simply a scheme for the ‘hidden’ confiscation of wealth. Gold stands in the way of this insidious process. It stands as a protector of property rights.”

From "Gold and Economic Freedom" a 1966 Essay by Alan Greenspan

About Me

I spent many years working in various analytic jobs and trading on Wall Street. For nine of those years, I traded junk bonds for a large bank. I have an MBA from the University of Chicago, with a concentration in accounting and finance.
Currently I co-manage a precious metals and mining stock investment fund in Denver.
My goal is to help people understand and analyze what is really going on in our financial system and economy.